Union Finance Minister P Chidambaram on Monday said the country should focus more on “anticipating crisis” rather than “responding to a crisis”.
Speaking at a national seminar on Indian Financial Code recommended by the Financial Sector Legislative Reforms Commission, the Union Finance Minister said, India responds to crisis rather than anticipating them and in a changing world, financial economic policy has to catch up with the needs of future India that we are aspiring to build.
The Minister vowed to eliminate unregulated players in the financial market. He said that multiplicity of institutions and regulators that had come up from time to time to meet newly perceived requirements, had potentially created regulatory overlaps, gaps and ambiguity on account of lack of role clarity.
This, he said, created inefficiencies in addressing critical emerging issues in an increasingly dynamic, complex and interconnected financial world. “The present arrangements have a number of gap areas, where no regulators are unambiguously in-charge, such as issue of regulatory oversight over diverse Ponzi schemes that we have discovered recently. These are cleverly designed to be out of the purview of regulatory agencies,” he said.
“The financial sector generates undefined areas which provide opportunities for the unregulated players in the market. They operate in the twilight zone endangering the discipline of market creating instability. This effects large consumers and reduces confidence in the system,” the Minister said.
Hailing the report of the Financial Sector Legislative Reforms Commission, he said the endeavour was to eliminate the unregulated space and the Indian government was focused on protecting the interests of the financial consumers. “A recent attempt in this direction is the ordinance dated July 18, re-promulgated on September 16, which considers any raising of resources by whatever means, if not regulated otherwise, as collective investment scheme.”